300,000 mothers face child benefit cut

Almost 300,000 mothers could face losing £30 a week in childcare benefits
under plans being considered by ministers.

Almost 300,000 mothers could face losing £30 a week in childcare benefitsPhoto: Rex Features

By Andrew Porter, Political Editor

7:00PM BST 05 Aug 2011

Iain Duncan Smith, the Work and Pensions Secretary, is locked in negotiations with the Treasury over the plans that are part of his drive to radically overhaul the benefits system.

He wants more mothers to go back to work and to encourage them and make it worth their while he wants childcare costs to be met.

He has established that most mothers decide that it is not worth going back to work after having a child if it is only for around 16 hours a week as any financial gain is offset by childcare fees.

But with Whitehall budgets squeezed, there is unlikely to be any new money available from the Treasury, beyond the existing £2 billion pot put aside for supporting working parents.

It means that money will have to go further. The Department of Work and Pensions yesterday confirmed that one option being considered is allowing parents to only claim 70 per cent of childcare fees, a maximum of £210 a week.

Ian Mulheirn, of the Social Market Foundation think tank, said: “Without the extra money from the Treasury, giving childcare support to short-hours working parents will probably mean taking money from other parents who currently get financial help.”

A DWP spokesperson said: “We know that the cost of childcare is one of the most important factors for parents when considering work. We have already said that under Universal Credit we will invest at least the same amount of money into childcare as in the current system and we are working closely with the Treasury and interest groups to agree the details of the childcare policy in Universal Credit.”

No decisions have yet been taken, but the DWP will put forward its proposals in the autumn.